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The Impact of Marijuana Legalization in Colorado

Colorado is one of the states in the country where marijuana is legal. Since its legalization, marijuana has had varying effects on the people, economy, and general existence in Colorado. Identifying the benefits and risks of marijuana use in the state is vital for CBD enthusiasts.

Marijuana laws in Colorado first changed when the amendment of the constitution of Colorado state in November 2020 allowed the use of medical marijuana. This was meant to be used by chronic patients battling debilitating medical conditions. However, a change in federal laws derailed the implementation of marijuana laws in Colorado.

READ — Does marijuana legalization affect Colorado’s home values?

It was not until a few years later that the combination of the federal policy change and permissive local laws liberalized the use and sale of medical marijuana in the state. According to Colorado marijuana laws, anyone with the outlined conditions can be issued a medical marijuana license. This license does not have an expiration date.

Effects of Legalizing Marijuana in Colorado

Legalizing marijuana has had a wide range of effects in Colorado. Knowing the impact of legalization will enlighten you on the trends in Colorado since it made the step to legalize marijuana. Here is an overview of the effects.

Financial and Economic Impact

The legalization of marijuana in Colorado has positively impacted its economy. When marijuana was legalized in January 2014, the state’s Department of Revenue reported a whopping $3.5 million in fees and taxes that month alone.

The sales trajectory increased until August when the amount remained at an average of about $7 million. The massive increase in revenue and taxes has boosted Colorado’s economy over the last decade. In December of the same year, Colorado recorded the highest revenue, with over $8 million collected. This is attributed to the legalization of marijuana in the state.

By the end of 2014, which was only the first year of marijuana legalization, Colorado had collected $44 million in revenue from taxes and fees. As if that is not enough, an additional $32 million was generated from taxes and fees on medical marijuana. Therefore, in total, Colorado received $76 million that year. Today, the state enjoys massive financial and economic gains as more money is generated from sales.

READ — Marijuana Tourism Attracts Millions of Visitors and Dollars

Crime

While some argue that the legalization of marijuana has increased crime rates in Colorado, statistics show the exact opposite. In 2010, half of all drug-related arrests involved marijuana, with over 90% of the victims only owning the product. This high number of arrests cost the 50 states a total of $7 billion in court fees, law enforcement costs, jail time, and probation. The high prosecution cost also impacted Colorado as the state spent a fortune on these cases. Since Colorado legalized marijuana, there has been an 84% drop in arrests related to medical marijuana. This has saved the state billions of dollars since 2014. Besides, the crime rates have generally reduced across the state.

The financial burden on law enforcement to patrol for marijuana-related offenses, using personnel to track down culprits and arrest them, has been reduced. Instead, these efforts are focused on more severe crimes that put the lives of locals in danger.

While some argue that marijuana legalization in Colorado has increased neurological tendencies toward aggression and violence, this is not precisely the case. Marijuana legalization in Colorado has reduced crime rates as those who used to sell marijuana in underground markets are now buying and selling the product through legal venues. This has reduced marijuana-related crimes and increased revenue in the state.

Traffic Safety

There has also been a change in road safety since the legalization of marijuana in Colorado. Legalization improves traffic safety if would-be drunk drivers substitute the bottle with marijuana. While some parties claim that marijuana also impairs driving ability, its usage does not have devastating impacts on road safety as alcohol. Marijuana legalization in Colorado hasn’t led to an increase in accidents, as the rate has remained relatively the same since legalization.

Effects on Health

Medical marijuana has had a significant impact on health. People with chronic conditions have benefited significantly from medical marijuana. However, despite the benefits, marijuana has also negatively affected health. One example is its impact on children’s health. The number of children admitted to the hospital for unintentional marijuana ingestion has increased from 0 in 2014 to over 1000 in 2022.

Conclusion

Marijuana legalization in Colorado has generally positively impacted the state. From enhancing the financial and economic state to reducing crime, marijuana legalization continues to have a positive impact on Colorado.

 

Anna Joubert is a cannabis enthusiast and a digital marketer working with State Cannabis Organizations. Her main goal is to help reduce the stigma around cannabis in the USA by educating people about the many uses of the plant. She is passionate about cannabinoid medicine and cannabis awareness.

Does marijuana legalization affect Colorado’s home values?

In 2012, Colorado became the first state to legalize recreational marijuana use with a vote of 55% in support. Since the first dispensaries opened in 2014, Americans have watched the state closely to see the long-term effects of the legislation. 

As other states and the District of Columbia have followed suit, one of the most notable impacts of the legislation has been an increase in property values. 

In fact, between April 2017 and April 2021, Colorado home values increased by an average of $89,377. Of course, not all of that is due to marijuana legalization, but a 2021 study found that, between April 2017 and April 2021, home property values increased by $17,113 more in states where recreational marijuana is legal, compared to states where marijuana is illegal or limited to medicinal use. 

Whether you are a private homeowner or a real estate investor, seeing a significant increase in property value will help your bottom line when it comes time to sell.  

Let’s take a look at some of the factors that contributed to that significant change in value. 

Dispensaries Correlate With Increase in Home Value 

According to the study, the number of dispensaries in a city has a direct correlation to property values. As the first to legalize recreational marijuana, Colorado is home to the most dispensaries in the U.S. As of July 2021, the state had 742 total dispensaries.  

For every dispensary added to a city, property values increase by about $519, according to the same study. In cities with recreational dispensaries, home values increased $22,090 more than in cities where recreational marijunana is legal but dispensaries are unavailable. 

 In comparison, for other homeowners around the country to add a similar increase in value to their home, they would need to make significant and expensive updates. The most profitable projects include installing new siding, making the home more energy-efficient, and renovating the kitchen and bathrooms with high-end finishes.  

These home improvement projects cost a lot up front and may put the homeowner in greater debt by having to take out a loan to cover the expenses. Even then, the return on investment may not always be as high when the time comes to sell.  

Increase in Tax Revenue Leads to Greater Home Value 

When promoting legalized recreational marijuana to voters, proponents of the law said it would increase tax revenue for the state. So far, that promise seems to be checking out. 

The real estate study found that home values increase an average of $470 for every $1 million dollar increase in tax revenue. In 2020 alone, Colorado collected $387,480 in taxes from marijuana sales. 

The revenue from this sales tax goes to support services that are attractive to prospective buyers — in Colorado, it goes toward supporting education.   

A portion of the money has also gone to build community buildings, such as health care clinics and schools. Between 2015 and 2020, the state gave $200 million toward school construction.  

One of the cardinal rules of real estate is location, location, location. When asked, most prospective homeowners say they are most interested in living in close proximity to good, well-funded schools, as well as public safety support, such as hospitals and fire stations.  

Reports also show that buyers are more likely to purchase property in an area with new developments in progress, including construction for major roads and event arenas. 

With Colorado investing its revenue well, the state is quickly becoming increasingly appealing to transplants from other parts of the country. This, in turn, creates a hot real estate market for sellers, who can make an even bigger profit on their home sale beyond its value. 

High Demand, High Profit 

While the real estate market has been hot across the United States throughout most of 2021, home values have been on the rise in Colorado for years. The reason: Demand for homes is greater than the supply. 

When new industries open in a state and more companies securing business loans to operate, it attracts new residents who need homes. This puts established Colorado homeowners in a prime position to cash in on their real estate investment.  

For example, with market values at an all-time high, a Colorado homeowner could make a substantial cash profit off of their home sale. Most homeowners expect to sell below market value during a cash sale, but with home values higher than ever, a homeowner could still walk away with a large return on their initial investment. Take a look at what is involved with selling a home fast for cash.  

With profit margins on the rise, savvy real estate investors can make the most of their profits through a 1031 exchange. In a 1031 exchange, a homeowner can defer paying taxes on the profits of their real estate business by investing them in a like-kind property within six months. Find out if a 1031-exchange could benefit you right now.